Residential Care for At-Risk Youth has Long-Term Economic Benefits for Governments and Society
Monday, April 27, 2020
Residential care for youth with severe emotional or behavioral issues involves intensive treatment and around-the-clock care. This makes the cost of care high and policy makers often want to know if there are other ways to provide this care or to reduce the amount of services in order to reduce costs. However, young people typically end up in these programs only after multiple other forms of care have been tried and failed, making group residential care programs very important. Therefore, it is vital to show the value of these services and to advocate for continued support.
Researchers at Boys Town and elsewhere have been looking at ways to place the context of residential care in relationship to the costs of not providing these services. In a recent study, Jonathan C. Huefner and his colleagues adapted a previously developed Return on Investment Tool (ROI tool) for use with Boys Town’s Family Home Program data . The ROI tool relates the cost of care to projected government fiscal and societal impacts, including increased economic contributions after treatment, tax revenue increases from employment gains, and costs associated with criminal recidivism and dependency on safety-net programs like unemployment .
The study looked at 141 individuals who had been treated for less than 6 months (median stay of 3.7 months) and 1031 who had been in treatment for longer than 6 months (median stay of 18.4 months). Outcomes were assessed by a 35-question assessment that was given 24 months after treatment. To compare the 2 groups, the authors normalized the data for the smaller group to the cost of similarly treating 1031 youth. Costs can only be compared for shorter treatment vs. longer treatment because it would be unethical to have a comparison group of young people needing treatment that do not receive it.
When it comes to cost, one thing that policy makers are often concerned about is whether there is really a need for longer, more costly stays; represented here as stays longer than 6 months. They reasonably want to know if a shorter stay could produce similar results while saving expense. In this study, the authors report that there was a definite benefit for kids who were in treatment for longer than 6 months, with higher educational achievement, better employment outcomes, and reduced recidivism. Here is a brief summary of the findings in this paper :
- The estimated cost to care for 1031 kids for 6 months or less was approximately $29 million, whereas the estimated cost for the same number of youth in treatment for more than 6 months was $153 million.
- The net benefit to government is estimated at $44 million through increased revenue and decreased expenditures in the future. However, with the increased cost of care for longer treatment amounts to an $80 million additional cost to the government.
- The societal savings through increased productivity, better employment, and other contributions over a 40-year adult lifetime increased for the more-than-6-month group by $325 million.
- For the group that received more than 6 months of care, the authors calculate that for every $1 spent the societal lifetime return is $3.61.
A short-term perspective which focuses only on governmental expenditure might conclude that the cost of care is greater than the fiscal returns. This perspective ignores the real human impacts of not taking care of these kids, which most people would not advocate. However, adult lifetime societal savings that are realized by giving kids who need it more care, training and education makes it clear that complete treatment has financial benefits that exceed any arbitrary cutoff. Such improvements (e.g., increased productivity and wages) have a direct impact on the community through spending and investment by these individuals over time. These outcomes should be of concern to policy makers who we need to support these programs.
- Huefner J.C., Jay L. Ringle J.L., Thompson R.W., and Wilson F.A., (2018) Economic evaluation of residential length of stay and long-term outcomes. Residential Treatment for Children & Youth, 35(3), 192–208.
- Wilson F.A., Araz O.M., Thompson R.W., Ringle J.L., et. al. (2016) A decision support tool to determine cost-to-benefit of a family-centered in-home program for at-risk adolescents. Eval Program Plann, 56, 43–49.
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